Over the past year, we have all faced a number of challenges. In addition to Covid-19 and the health crisis, the home building industry has seen some real volatility in the cost of lumber and other materials, as well as longer lead times for certain supplies. What do risking lumber prices mean for clients who are considering, or in the process of, building a custom luxury home?
Why is Lumber So Expensive?
According to the NAHB, “lumber prices have skyrocketed more than 180% since last spring.” NAHB Chairman, Chuck Fowke, noted, “The elevated price of lumber is adding approximately $24,000 to the price of a new home,” Fowke said. “Though builders continue to see strong buyer traffic, recent increases for material costs and delivery times, particularly for softwood lumber, have depressed builder sentiment this month. Policymakers must address building material supply chain issues to help the economy sustain solid growth in 2021.” Much of the volatility is related to the shut-down that occurred at a large portion of lumber bills, amidst the Covid-19 pandemic, in 2020.
Covid-19 Vaccines Should Open Up the Industry
Like any other industry, as Covid-19 vaccines roll-out across the country, things should begin to return to some sense of normalcy, including the production of raw materials, like lumber and other materials used in the construction industry. More and more plants are reopening in Canada and the US, which will increase production, inventory, and should drive lumber prices back down to more reasonable levels.
Mueller Homes Approach
At Mueller Homes, we have seen this type of volatility before. With over 30+ years in the industry, we’ve witnessed shortages in supply, demand, housing bubbles, and workforce issues. So, lumber prices are just another challenge we are prepared to overcome. Our best approach has always been proper planning. We have worked hard to establish solid relationships will mills and manufacturers. We are in touch with our suppliers and vendors, getting weekly updates on lead times. In many cases, we are able to anticipate and order supplies well in advance of our typical construction schedule, so that if there are delays, we are able to anticipate and build those time frames into the construction schedule. This has resulted in a very smooth process for our organization and the clients we serve. It’s another reason that sound business planning is an important consideration when you select your builder.
The best advice we can offer is to work with your builder to understand the current climate and to ensure your builder has their finger on the pulse of the industry. If you are thinking about building your once-in-a-lifetime custom luxury home, feel free to download our ebook on the subject: “Designing & Building Your Custom Dream Home: How to Create an Experience You’ll Love to Remember.”
Are you ready to get started? Contact Mueller Homes today, and let’s schedule a discovery meeting.